The Danger of Short-Sighted Management

Great leaders build great organizations and position them for a long-enduring future. However there seems to be a paucity of great leaders. Most leaders are so busy looking after themselves that they have insufficient time to devote to the future of their businesses.

Unselfish, excellent, future-focused management is becoming like the dodo bird—-extinct.

SO LITTLE SUBSTANCE

Managers are now more about image. Managers are concerned about their “brand.” The priority seems to be “looking good,” not doing good. Perceptions are everything as the “cult of personality” trumps the principle of “character.” Managers will all too readily “throw their employees under the bus,” rather than guide or mentor them when they have a problem.

Common wisdom suggests the manager needs to be perceived as assertive, in charge, and decisive. This is particularly true in times of economic downturn. Frequently the “best” manager in difficult times is thought to be the one who cuts the most the fastest, even when those actions may be jeopardizing the company’s future.

It’s important for the leader to nurture a long-term perspective rather than one aimed exclusively at short term profitability. The decisions made by management to attain more immediate objectives must be consistent with the mission and enduring objectives and values of the enterprise. This temptation to yield to current pressures instead of having the future as a top priority has resulted in the decline or dissolution of many organizations.

It’s certainly difficult to focus on the long-term when the current problems seem so overwhelming. However, try an analogy. If you ran your life without regard to the long term viability of your personal enterprise, you might be tempted to get rid of your kids or wife as excess expenses. You might sell your house, or refinance everything to raise cash. And, yes, there are families that are compelled to take drastic actions to survive. But most of us have a long term view, because we know we will have to live with the consequences of our impulsive decisions. Oftentimes this is not the case in the business world, where managerial performance is based on current results. This short-sighted view results in many poor or counter-productive decisions.

Most often the managers do not have to live with the consequences of their decisions as their performance is based on quarterly or monthly results. By the time the damage is done, they’re long gone. In fact, they’re generally positioning themselves for the next career move from day one! Very few top managers spend their lives with one company; most probably only invest a few years. Accordingly, their objective, unfortunately, might lean more towards short-term success, rather than the long-enduring variety. With attitudes like these, the current generation of corporations may be in jeopardy over the long-term.

BUILDING FOR THE FUTURE

A very influential management book titled “Built to Last,” (Jerry Poras, 2004) heralded the practices of some major corporations that employed and nurtured a culture and practice that allowed them to survive, adapt, and prosper over many decades, or even longer.

Another excellent book titled “Good to Great” (2001) by Jim Collins was based on studies that showed second-tier companies could make the leap to greatness through excellent management. Interestingly, in his study, a counter-intuitive finding about leaders was identified. Namely, the most effective leaders are “humble and strong-willed, not outgoing.” Why would this be? Think about it. Jack Welch may be an extrovert, but is Bill Gates or Warren Buffet? How about the “Google Boys?” Of course, one could argue that the aforementioned are more entrepreneurial than managerial, and this argument seems to have merit. However, these individuals transitioned into management leaders as their businesses grew.

The point here is that leaders of successful companies are certainly there for the long-term. They’re less concerned about their personal image, or next quarter’s results, and more concerned about the future of their organizations. Perhaps if we were able to inculcate this kind of mentality in the non-founder leaders we would see more organizational permanence.